Why did Tamil Nadu opt for an expensive PPA?

Bad predictions of an extended summer due to El Niño, failure of the southwest monsoon, failure to plan to tie up with power generators through short-term power purchase agreements, dwindling wind power and inability to utilize maximum capacity in thermal power plants are among the factors that have forced Tamil Nadu to purchase power at high cost. Image for representational purposes only. File | Photo credit: SR Raghunathan

Story so far: The Tamil Nadu Power Distribution Corporation Limited (TNPDCL) recently signed a power purchase agreement at over ₹30 per unit. This has been criticized by various opposition parties, who have condemned the rate the state has to pay, comparing it to other states that pay much lower rates for power purchase agreements.

The government specified that due to the high demand for electricity in the state this time, thanks to the extended summer situation, it had to opt for such an agreement. Power Minister CTR Nirmal Kumar claimed that currently only gas-fired power is available for purchase, attributing it to the high cost of PPA.

Published – 14 Oct 2026 13:48 IST